Corning Inc. has lined up a $575 million bridge loan to fund a $23-a-share bid for Damon Corp., a medical-testing company based in Needham Heights,. Mass.
A Corning spokeswoman refused to identify the lenders. but Morgan Guaranty Trust Co. is believed to be one of them. Morgan also declined to comment,
The banking unit of J.P. Morgan & Co. is one of Corning's traditional lenders.
Corning's bid was disclosed on Monday. following Damon's acceptance last week of a $16-a-share offer from National Health Laboratories Inc.
The National Health Laboratories bid, considered inadequate b,, some Damon shareholders, is backed by a $500 million bank credit led by Citibank. Half of that amount would be used to refinance NHL debt, even if the bid fails.
Corning's $575 million bridge loan would cover the purchase of Damon's 16 million shares and the assumption of Damon debt.
If Corning wins the bidding, as seems likely, the choice of permanent financing probably will depend largely on conditions in the public capital markets when the deal closes, said Martin Knoblowitz, an analyst at Standard & Poor's Corp.
Corning's senior debt is rated A-plus by Standard & Poor's.